March 7 (Bloomberg) -- The pioneer of political opinion
polls in India says he has good reason not to trust them: he has
been asked to rig them on more than 10 occasions over the past
two decades in return for envelopes of cash.

N. Bhaskara Rao, who has conducted surveys for Robert F.
Kennedy and Indira Gandhi, said he once had to fire his right-hand man after discovering the person accepted money from a
political party to doctor a poll. That’s why he wasn’t surprised
when a local broadcaster last week exposed employees of 11
polling companies offering to fix results for money.

“I used to think there were one or two respectable polling
agencies, but not anymore,” said Rao, 73, who helped develop
the polling industry in India in the 1970s and remains chairman
of Marketing and Development Research Associates, which conducts
consumer market research. “It is a bit like fixing matches in
cricket -- everyone knows it is going on.”

Investors are grappling with how much faith to put in
surveys showing Narendra Modi’s opposition Bharatiya Janata
Party winning elections with results due May 16 after they
failed to predict the outcome of the last two national votes.
Election officials have called on lawmakers to ban opinion polls
during the campaign period and asked police to look into the
claims by News Express.

‘Pinch of Salt’

“One will have to take the opinion polls with a pinch of
salt,” said Mahesh Patil, co-chief investment officer at Birla
Sun Life Asset Management Co. in Mumbai, who manages about $2
billion in equities. “We won’t get too much guided by polls in
our investment decisions as they haven’t got it right every
time.”

CVoter, Nielsen and the Centre for the Study of Developing
Societies, the three largest organizations conducting national
political polls, project Modi’s BJP to emerge as the biggest
party, an outcome favored by investors seeking a change to
revive Asia’s third-biggest economy. Of those, CVoter was the
only one named in the News Express report.

Prime Minister Manmohan Singh said in January his
government could’ve done better at controlling price rises after
the BJP trounced Congress in state elections held late last
year, even while defending policies to buy farm produce at
guaranteed prices, boost rural wages and distribute cheap food.
India has Asia’s highest inflation rate, and the rupee has
fallen 11 percent against the dollar in the past year.

BJP Lead

The CVoter, Nielsen and the Centre for the Study of
Developing Societies surveys predict the BJP will win 188 to 217
seats of the 543 up for grabs in the lower house of parliament,
short of the 272 needed for a majority. Congress would win 73 to
91 seats, its lowest-ever tally, with smaller parties splitting
the rest.

The BJP and its two allies would win as many as 232 seats,
40 short of a majority, according to a poll released yesterday
by the Centre for the Study of Developing Studies. Congress and
its coalition partners would get as many as 139 seats, it said.

About 815 million eligible voters, more than double the
U.S. population, will cast ballots in nine rounds of voting from
April 7 to May 12, the Election Commission of India said this
week. Results will be announced on May 16 as votes are counted
from the Himalayas to islands in the Bay of Bengal.

“The corporate world is betting on the BJP and the Modi
phenomena,” said Satish Misra, a political analyst at the
Observer Research Foundation in New Delhi. “There is a lot of
suspicion that money is exchanging hands, and some of these
survey companies are not all above board.”

Past Failures

India’s polls failed to predict the past two national
votes.

In 2004, Congress won even after the polls suggested the
BJP would retain power, leading to the biggest one-day sell-off
of stocks among foreign investors in more than four years on
concerns that the new government would abandon policies to
control spending.

Five years later, after most surveys predicted a close
fight, Congress won with the largest tally in two decades,
boosting the stock market by a record 17 percent in its next
session as investors bet a stronger mandate would allow Singh to
ease foreign investment rules and sell state assets.

The News Express sting operation broadcast last week showed
staff of polling companies telling undercover reporters they can
fix results for a price. The election commission released a
transcript of the report and News Express posted segments on its
website.

‘Sheer Sensationalism’

CVoter, based on Delhi’s outskirts, was the most well-known
company named in the report. India Today, which says it has a
readership of 1.8 million, suspended working with CVoter after
an employee was caught on film saying the polling company
charges a separate fee to use a larger margin of error to
manipulate poll results.

Yashwant Deshmukh, CVoter’s founder, denied any wrongdoing,
says his polls are accurate and claims his company, which also
conducts surveys for English-language broadcaster Times Now, is
being smeared by unnamed politicians who want to discredit
opinion polls.

“We will see on the counting day -- if the results stand
correct, then I am going to ask a lot of people to apologize,”
Deshmukh said in an interview. “It is just sheer
sensationalism. I don’t know what they are trying to prove.”

In another incident, Arun Behuria of New Delhi-based
Quality Research Services (P) Ltd. told News Express that it had
released a poll showing the BJP would win 200 of 403 seats in a
local election in Uttar Pradesh, India’s most populous state,
even though employees knew it would fail to win even half that
number.

‘Business Trick’

Behuria, the managing director of Quality Research
Services, denied the company conducted the Uttar Pradesh poll
and said he made the comments to try and impress the clients so
he could win the contract. He said that he would never take
money to rig a poll.

“It was a business trick I applied to get the
assignment,” Behuria said in an interview. “I have never done
any unethical things in my whole career.”

India’s election commission asked the government in
November to pass legislation to ban publishing surveys after the
election dates are announced, citing concerns that the polls are
disingenuous. Among the country’s 15 largest parties, only the
BJP opposed the ban.

‘Simplistic Solution’

Prakash Javadekar, a spokesman for the BJP and a member of
the upper house of parliament, said banning opinion polls would
be draconian and undermine free speech.

“If you ban these, what will you decide to ban next?”
Javadekar said. “It’s a simplistic solution to a complicated
problem.”

Congress wants the polls outlawed because they cannot be
accurate in a country as diverse as India, according to Abhishek
Manu Singhvi, a party spokesman. The country has 1.2 billion
people that speak about two dozen languages with more than 2,000
dialects.

Even without fraud, Indian opinion polls face sampling
difficulties that can affect their accuracy. Much of Congress’s
support stems from rural areas that are harder to reach, and
many constituencies feature close contests between three or four
different parties, making them hard to predict.

“Generally, I think the polls are wrong because of
dishonesty and manipulation,” said S.Y. Quraishi, India’s
former chief election commissioner, who retired in 2012. “It is
not just paranoia -- look at the problem of paid news,” he
said, referring to candidates and political parties paying media
outlets for positive news coverage.

RFK, Indira

Quraishi said the election commission uncovered more than
2,000 cases of media outlets taking cash for positive stories
while he headed the agency. The commission lacked resources to
investigate allegations of poll tampering, he said.

Rao, who helped pioneer opinion polling in India, studied
for his doctorate almost half a century ago at the University of
Iowa, where statistician George Gallup earned his degree before
developing the polling industry in the U.S. During this time in
the U.S., Rao conducted an opinion poll for Robert F. Kennedy
that predicted he’d win the Democratic presidential nomination
before his assassination in 1968.

Upon his return to India, Rao conducted polls for former
Prime Minister Indira Gandhi, including one that correctly
showed she would be defeated if she held elections after
declaring an end to emergency rule in 1977. Rao, who says he has
mentored most of India’s leading opinion pollsters, sees the
malfeasance as deep rooted.

“Opinion polls do make a difference to how people vote
when they are published in the media,” said Rao, who is now
chairman of the Centre for Media Studies, a New Delhi-based
research group that studies the media and politics. “Our
democracy is being corrupted.”